When gearing up to sell your most valuable asset, there’s many decisions you have to make:
• Should I redecorate before I sell, or leave the home as-is?
• Do I want to wait until the spring market to sell?
• Do I need to put “crazy neighbor” on the Seller’s Disclosure?
Not only that, but one of the most important questions of all needs answering: Should I FSBO, or hire a real estate agent? For starters, let’s talk about what FSBO means.
"For Sale By Owner", otherwise known as FSBO, refers to a method of selling property where the owner handles the entire sales process themselves, without hiring professional representation in the form of a real estate agent. This approach is often chosen to avoid paying commission fees to real estate agents.
There’s a proverb that I’m sure you’re aware of: If you want something done right, do it yourself. While that may be good advice in many situations, it’s actually the worst idea when it comes to selling a house. Most people wouldn’t act as their own lawyer, or fix a complicated plumbing problem themselves, and there’s a reason why experts in these fields exist.
And actually, while it may feel like you’re saving a ton of money by not paying an agent’s commission, a study showed a typical FSBO home sold for $217,900 compared to $295,000 for agent-assisted home sales. If that isn’t compelling enough, here’s 4 things you need to consider when selling your home yourself:
1. Safety Measures
If you sell your home yourself, the burden of keeping your family and house safe is entirely on your shoulders. And, unless you have all of the equipment a professional Realtor has, it can be hard to do.
An agent will have the proper protocols in place to protect your belongings, but also your health and wellbeing too. Agents will regulate the number of people in your home at any time, and, if you desire it, ensure mask-wearing, bootie-wearing and proper sanitization. Agents use digital lockboxes that only other agents have access to, meaning the people accessing your home are vetted. As a FSBO, you wouldn’t have a system like this in place.
Not only this, but a quality agent will provide you with an app that allows you to approve or reject a showing if the time is/isn’t convenient for you, and they arrange open houses in a manageable way so they can always keep an eye on who is in your home!
2. Online Strategy
Here are some unsurprising statistics: 47% of all buyers begin their home searches online, as the very first step. And a whopping 96% of buyers will use the internet at some point in their homebuying journey. In order to survive in the digital world, most agents have developed a strong digital strategy. The best agents utilize social media, websites and blogs, strategic online advertising, 3D/virtual reality tours and more (the list really goes on and on) to find buyers quickly and efficiently for the homes they list.
A larger digital reach = more eyes on the home = more viewings = more and better offers (netting you much more profit than what you’ll save from not paying an agent commission). In fact, a Collateral Analytics study revealed FSBO sellers don’t actually save any money by forgoing the help of an agent, and in some cases the seller might even net less money. It was found the difference in price between a FSBO home and an agent-listed home was an average of 6%. And one of the main reasons for this? Effective exposure.
“Properties listed with a broker that is a member of the local Multiple Listing Service (MLS) will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. Those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”
3. Negotiation Strategy
Here are just a few example scenarios where you might need to negotiate by yourself if you go FSBO:
- With the buyer, who is of course going to want the best deal possible (and if they have a buyer’s agent working in their interest, they’ll have expert advice that you’ll be lacking)
- With the buyer’s agent, who is going to solely represent the best interests of their buyer, and have no care for your interests
- With the appraiser, if the value of the home is brought into question. Are you prepared to submit a “comps” report if you feel the appraisal amount comes in less than you expect?
The benefit of hiring a listing agent is that you’ll have someone representing your best interests, who knows the market and local housing laws, and has all the best contacts should any issues arise. Agents negotiate day in, day out, and are trained to deal with all of the above situations. They know how to mediate the emotions felt by buyers looking to make what is probably the largest purchase of their lives.
Homesellers worry so often about the commission they need to pay an agent, but forget that without an expert negotiator on their side, they are more likely to overpay along the way anyway, which negates the cost saving of not having an agent.
4. Buyer qualification
You’ve found someone who wants to buy your home: excellent, that’s the first and most important step! But that first step will grind to a halt if the buyer cannot even acquire a mortgage for your home in the first place. As a FSBO, it’s highly difficult to be involved with your buyer’s mortgage process, whereas a real estate professional can be involved.
They will know which questions to ask and, in most cases, will be intimately aware of the progress being made toward the buyer’s mortgage commitment. Agents work with lenders every single day to ensure buyers can make it to the closing table, and that expertise can be the difference between a successful sale and a lot of wasted time.
Still not sure you want to hire an agent?
Listing on your own means you have to manage the entire transaction by yourself, which can leave you in a very vulnerable position. Why do that when you can hire an agent and still net even more money?
If you’re still not sure, the best thing you can do is reach out to a local, trusted and highly reviewed agent and tell them your worries. Let them pitch to you all of their services they offer that will net you a higher price for your home. And once you’ve heard them out, then make up your mind.
